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Going Cyber-Bare Exposes Insurance Agents to E&O Claims


 Going Cyber-Bare Exposes Insurance Agents to E&O ClaimsAre You Talking About Cyber Liability Coverage to Your Clients?

Recent studies from various sources cite that there are a few common reasons why companies don’t purchase Cyber Liability insurance – even in light of all the media attention that data breaches and cyber security garner. Lack of education ranks high on the list for not securing coverage with many firms thinking they’re just not vulnerable to attacks. They either think they are too small or in an industry that is not susceptible to a cyber breach, or they have strong enough cyber security measures in place as a large company and don’t see the need for coverage. Many business owners also believe they already have coverage under their existing policies. Some don’t know that Cyber Liability insurance coverage exists.

As stated in numerous articles we’ve written, every business is vulnerable to a data breach. Today, business owners hold more than data than ever before – on employees, customers and suppliers – and with the rise in cyber crime no industry segment or business size and type is immune from an attack. In fact, smaller companies may be more vulnerable because they haven’t implemented a robust cyber security plan. One study shows that over a third of global targeted attacks are aimed at businesses with fewer than 250 employees.

Moreover, this valuable asset is not covered by standard policies. A standard property policy will not respond in the event a firm’s data is damaged or destroyed. A commercial general liability typically does not respond to liability claims by third parties in the event of a breach. A traditional business interruption policy would not respond in the event of a hack attack or computer virus that takes a system down and causes a firm to lose profits.

Businesses need to be aware of these facts and more to properly insure against cyber threats. They need to understand that without the proper policy in place they stand to incur significant costs to discover the root of the problem, notify clients of the breach, make available customer credit monitoring, undertake crisis management measures, pay for business interruption expenses, address third-party liability claims from customers and or suppliers affected, and more.

Professional commercial insurance agents and producers need to be talking with all their business insurance clients about cyber and the issues involved in not having coverage. If not, you’re exposing yourself to an Errors & Omissions claim should one of your clients have a cyber loss and find him or herself without coverage. The last thing you want to hear is, “I believed I had coverage under my Commercial General Liability.” Or, “You never mentioned Cyber coverage to me.”

There are many different types of policies available today depending on the industry and the business’ exposures that can be designed to meet a client’s specific needs. With the support of a specialist in Cyber Liability/Privacy & Network Security insurance, you can undergo a well-thought-out review and campaign of your clients’ exposures and address them with individual coverage plans.

Axis Insurance Services specializes in Privacy & Network Security insurance and provides commercial insurance agents with E&O coverage. This makes us an ideal partner in helping you to insure your clients against cyber threats while protecting yourself against a professional liability claim. Give us a call today to discuss our products and how we can help protect you while you cover your clients’ exposures. We can be reached at (877) 787-5258.

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Blogged on: November 21, 2014 by Mike Smith
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